Gemini Trust Against Digital Currency Group Plan In Genesis Global Case

JAKARTA - Lawyers representing the Gemini Trust have scrapped a plan submitted by the Digital Currency Group (DCG) to Genesis Global creditors.

In a lawsuit on September 15 at the United States Bankruptcy Court for the Southern District of New York, the legal team accused DCG of "gaslighting" Genesis creditors through "fabricated, misleading, and inaccurate statements" in its recovery plan.

The plan, filed in a bankruptcy court on September 13, states that unauthorized creditors could have a "70'90% recovery with most of the digital currency recovering, while Gemini Earn users could expect a "about 95'110%" recovery for their claims.

According to the legal team, DCG is trying to "attract Gemini Lenders from accepting an agreement" that will allow companies to pay less than they should have paid. Lawyers asked the company to "significate to improve the loan requirements" granted to Genesis and not use the Genesis bankruptcy process as an excuse for justification in the recovery plan.

"In reality, Gemini Lenders will not actually accept anything that approaches the proposed recovery value in the 'approval in the current principle,'" reads the filing lawsuit on September 15. "Don't get me wrong: Gemini Lenders will not really accept anything that approaches the recovery value proposed in the 'approval in the current principle.'"

Legal disputes involve the involvement of Gemini and DCG crypto exchanges in the Gemini Earn program, funded in part by Genesis. Genesis halted its withdrawal in November 2022 following the collapse of FTX, citing an "unprecedented market shock" at the time, and filed for bankruptcy in January 2023.

According to Gemini's court filing, Genesis owed it more than $3.5 billion to 50 of its creditors when the Chapter 11 filing. The crypto exchange filed a claim in May to recover more than $1.1 billion for about 232,000 Earn users and filed a lawsuit against DCG and CEO Barry Silbert in June, on charges of fraud.

"Not only as an architect and mastermind of DCG and Genesis fraud against creditors, he was also directly and personally involved in implementing it," Gemini founder Cameron▁Tawvoss said in June.

The United States Securities and Exchange Commission (SEC) filed a civil lawsuit against Gemini and Genesis in January on charges of selling unregistered securities through the Earn program. The two companies filed a request to cancel the case in May, but it is still ongoing today.